Former Nova chief arrested

The Osaka Prefectural Police served the warrant for the alleged embezzlement after questioning the 56-year-old Sahashi on a voluntary basis starting in the morning.

Sahashi, who headed what was once Japan’s largest English-language school chain, is suspected of diverting the ¥320 million in reserve funds, set up specifically for employee benefits, last July 20 to Nova through an affiliate firm that he effectively owned.

Nova faced a liquidity crunch after the government ordered it to suspend some of its operations last June for allegedly lying to prospective clients about tuition charges and also faced lawsuits by clients seeking tuition refunds.

In October, a labor union that includes non-Japanese Nova instructors requested that labor authorities build a criminal case against Sahashi and others at Nova.

Nova’s board sacked Sahashi and the company filed for corporate rehabilitation.

Some Nova schools have been taken over by G.communication Co., based in Nagoya.

Established in 1981, Nova at one point had 300,000 students and employed about 4,000 foreign instructors